G7: Policies should not target forex

TOKYO: Central banks should conduct monetary policy for domestic reasons and if they follow this rule then global economic growth will accelerate, Bank of England (BOE) governor Mervyn King said yesterday.

Group of Seven (G7) countries were in agreement that no country should intervene in foreign exchange or have a specific target for their currency, but that if a country is pursuing policies to boost its domestic economy, this could cause the country's currency to fall, King said after giving a speech here.

Some countries have expressed concerns that aggressive bond purchases by some central banks could push down their currencies and spark a wave of competitive devaluations that could harm global trade. Reuters